ILU - Iluka Resources

[Student of Gann]

Just had a look at ILU which is not on my radar and Top is indicated for the 21st August so will look to short it at 9.97 if price pulls back to that point .

 

[Student of Gann]

ILU :

21st August Top in place .

 

[Dark1975]

ILU : View attachment 108104 21st August Top in place .

I personally wouldn't be shorting this chart, Unless i have missed something you could point out ?
The trend line suggests over 80 candles a series of higher lows consolidating in to resistance /support line creating a possible leg up or a pause,
Me personally i'd prefer to see the current chart to go below either the last two points of resistance of $9.50 or $8.90 to show a change in trend,
The last to candles i have circled both forming hammer's, If the candles pointed as a shooting star then maybe a possible change in trend,
Also note a commodity chart in this current run would suggest otherwise,

 

[Student of Gann]

yes Price exceeded the Cycle High Date . I didnt end up taking this trade which was lucky .

 

[Dona Ferentes]

ILU over the last 12 months, now adjusted for the Deterra Royalties Ltd (DRR) demerger - announced Sept, in effect by Nov.

Probably a cleaner company now, and easier to price. With a PE of 46, it ain't cheap,.... gains already priced in for the new RE story (hat tip Mick) that ILU is looking to hitch on.

Recently, ILU said it was looking at "constructing a rare earth refinery at Eneabba in Western Australia", and any move downstream will allow Iluka to capture more of the value chain, and give a boost to its revenue and profit margins.

It has plans to increase sales of rare earths to 9,000 tonnes a year from the second half of 2021. This will be done via the ramp-up of the Eneabba Phase 2 project. The development of the Wimmera project could then take Iluka to 15,000 tonnes a year, or around 10% of the global market share, by 2025 or 2026.

“Notwithstanding the permitting and technical challenges, our analysis shows that if ILU were to expand into downstream refining of monazite into a rare earth oxides, this could increase the value of the Eneabba & Wimmera projects to c. A$1.2bn,” said Goldman Sachs.

"That equates to a $2.70 a share uplift to the Iluka share price and the broker has upgraded its 2025 earnings per share (EPS) forecast on the stock by 45%. This in turn prompted Goldman to up its price target on the Iluka share price by 22% to $7.20 a share". Goldman also "believes Iluka’s zircon and TiO2 sales will bounce by 20% this year with improving global demand for ceramics and pigment, with a belief that there will be a supply deficit of zircon this year due to falling global supply."

 

[mullokintyre]

Zircon is supposed to be tending towards short supply.
Mines in OZ - Gingko, Snapper, Gwindinup, Atlas Campape and Wonnerup were all subsumed into Beemax.
One of my old favourites, Bemax, has been subsumed into Cristal Mining, a wholly owned co owned by private interests in Saudi Arabia. Does Josh Freydenberg know about this?

 

[sptrawler]

Further to @Dona Ferentes post in January.
Iluka looking to build a rare earths processing plant in W.A, mid way between Geraldton and Perth, at last a bit of onshore value adding. Maybe.

Iluka finds favour in bid to build rare earths refinery

The ASX-listed miner’s proposal to build the nation’s first full-scale rare-earths refinery has gained the support of senior Morrison government ministers.

www.smh.com.au

From the article:
A proposal to build the country’s first full-scale rare earths refinery has secured the support of senior Morrison government ministers, as Australia works to position itself as a key supplier of raw ingredients in smartphones, electric cars and wind turbines.

The board of ASX-listed Iluka Resources, a $3.6 billion company, is assessing the feasibility of developing a refinery at Eneabba in Western Australia to process rare earths – a group of elements used in a range of high-tech products and military weapons systems.
If the project proceeds, it would position Iluka as just the second non-Chinese supplier of refined rare earths materials, along with its larger rival Lynas Corp.
Federal Resources Minister Keith Pitt and Trade Minister Dan Tehan, who met with Iluka’s board of directors in March, said the Eneabba project was aligned with the Morrison government’s objective to move Australia further along the rare earths value chain.

“Establishing a domestic rare earths oxide production capability would move Australia further along the rare earths value chain, create regional jobs, capture more economic benefit from Australia’s resources and build security in the global supply of critical minerals,” the two ministers wrote in a letter dated May 10.

Iluka (ASX:ILU) share price falls despite government letter

 

[DrBourse]

25/11/21 8.00am

ILU Financials only rate as GOOD from a scale of VG, Good, Av, Bad, VB.

IV is closer to $6.50 so with SP @ $8.55 it is considered EXPENSIVE atm.

TA suggests it is just above a Support Line of $8.50, LR (pages 139 to 142) is still in a Downtrend, However CCI (pages 108 & 109), and MFI (p 95) both suggest a ST Uptrend.

These are my personal observations, they may be of interest to some punters.
NOTE:- I DO NOT hold ILU atm.
Remember to DYOR.

Cheers.

DrB

 

[mullokintyre]

Not much discussion on ILU, but that might be about to change.
Up 4% today, probably partly due to this announcement.
From the Australian

The federal government will kick in almost 90 per cent of the direct costs of building Iluka Resources’ $1.2bn rare earths refinery through a low-cost loan, as the mineral sands major confirms its full-blown move into the rare earth market.
Iluka said on Monday its board ticked off on the construction of a $1.2bn refinery in WA, with the federal government to chip in a $1.05bn low-cost loan to help build the plant, which will produce about 17,500 tonnes of rare earth oxides each year.

The project will be Australia’s first domestic rare earth refinery, and Iluka said construction will begin late this year, with first production due in 2025.
The decision is the culmination of Iluka’s long term diversification strategy. Iluka began exporting a rare earth concentrate drawn from tailings at its old Eneabba mineral sands operations in WA in 2020, before expanding those operations to produce a higher grade concentrate in the second phase of the strategy.

The company said the loan from the federal government’s $2bn Critical Minerals Facility would be non-recourse to its own balance sheet, with Iluka planning to set up a separate special purpose subsidiary to build and manage the refinery.

Finally the government has put money into something that might be useful.
Mick

 

[divs4ever]

time will tell

( i hold ILU )

i remember the logic used when LYC chose Malaysia for their plant

 

[Craton]

ILU has seen on a bit of an uptick since Dec 2021

 

[bk1]

Finally the government has put money into something that might be useful.

You're a hard man to please.
Thats an awful lot of money to try and gain a foothold in a market that is totally dominated by China. I realise that it was the only way ILU could make it happen, however, there is a reason Lynas had to go overseas to process their ores.
Lets hope that all permits and approvals pass without a problem and the feedstock used is monazite.

 

[CityIndex]

ILU has seen on a bit of an uptick since Dec 2021

The move ended up stalling right at $12.50, but since the stock is trading at all-time-highs it isn’t profit-taking at a nice round number.

What was interesting was that buyers stepped in to support $ILU right around the previous highs at $11.85, and if it can continue to hold above this level it might be an indication that today’s news could help sustain the uptrend.

Of course, all trading carries risk, and a break below this level might open the possibility for a deeper pullback on further profit taking.

 

[DrBourse]

25/11/21 8.00am

ILU Financials only rate as GOOD from a scale of VG, Good, Av, Bad, VB.

IV is closer to $6.50 so with SP @ $8.55 it is considered EXPENSIVE atm.

TA suggests it is just above a Support Line of $8.50, LR (pages 139 to 142) is still in a Downtrend, However CCI (pages 108 & 109), and MFI (p 95) both suggest a ST Uptrend.

View attachment 133360

These are my personal observations, they may be of interest to some punters.
NOTE:- I DO NOT hold ILU atm.
Remember to DYOR.

Cheers.

DrB

The next 3 Trading Days should give a clearer signal on ILU’s next move.

ILU is still trading within it’s IV Range of $8.87 to $13.69 (The grey area on the chart).

There are still Q’s abt the recent Finance Deal – punters may pause till the truth is known – and if they do pause for a while, they may look at the Technicals.

Most ST & LT Inds are rising, the CCI is approaching a SHH (pages 108 & 109), and the LR is approaching the Top of the Sell Zone (pages 139 to 142) The candles for 4/2/22 and 5/4/22 are a worry, as is the Gap Up that it created.

Personally I would require conifirmation TA Signals B4 I act.

Remember that I use FA to Select Securities, Then I Trade them based on TA - I do not trade securities on FA.

ILU’s Debt to Equity atm is Very Low – However - Might jus add a bit more to this post abt “DEBT”.

Basically, the Debt to Equity Ratio (D/E Ratio) is explained as “to express all company liabilities as a % of Shareholders Equity”…..

I should also mention that there are NUMEROUS different ways to calculate the D/E Ratio…

Here are a few of the options:- ….

1. Total Liabilities/Shareholder Equity multiplied by 100 = Ratio %....

2. Interest Bearing Debt/ Shareholder Equity multiplied by 100 = Ratio %....

3. Interest Bearing Debt minus Cash/ Shareholder Equity multiplied by 100 = Ratio %....

4. Shareholder Equity/Long Term Debt multiplied by 100 = Ratio %....

5. Long Term Debt plus Total Equity = Capitalisation THEN That capitalisation Total is used in the final calculation of:- Capitalisation/Long Term Debt multiplied by 100 = Ratio %....

6. Total Liabilities/Net Worth minus Intangible Assets…

7. Financial Debt/ Shareholder Funds minus Intangibles & Preference Capital…

And there are several more ways to calculate a D/E Ratio…

Some Analysts show their D/E Ratio as “Gearing or Leverage Ratios”…



Not sure yet where ILU’s Debt to Equity Ratio will end up.

So, Misinterpreting the D/E Ratio can be fatal to your profits – you may be missing out on a great trade because you used a D/E Ratio that was ridiculously high, when, with the correct calculation is was actually very low…

The bottom line as usual is DYOR…

Find out how your provider calculates their D/E Ratio, and then decide if that calculation is what you need to help in your analysis procedures….

Basically a High Debt/Equity Ratio needs to be investigated before anyone jumps to an incorrect assumption....

Debt can be a problem in some cases, But for some stocks the "Excessive Debt" is Providing Positive Returns to Shareholders....

Remember there is "Good, Productive Debt" But there is also "Bad and Unproductive Debt", the trick is identifying what is OK relative to individual companies....



Say that Debt is helping provide a 2.5% Div Yield,…..Zero Debt they would also probably have a Zero Div Yield - so theoretically a bit more Productive Debt could increase that return substantially - This is where astute directors etc come to the fore - Good Financial Management will make a company greater - Bad Financial Management will send a company broke....

Have you researched the Co Directors and the Financial Team, what is their past record like???....Do they know what they are doing with the current ??% Debt/Equity Ratio???......How much is Short Term Debt, How much is Long Term Debt, What are the Loan Contract Details...are there Roll Over Provisions in the Contracts....What are the Loan % Rates, and are the Rates Competitive, or are they exorbitant????….Look at their Balance Sheet/Financial Position, Do they have money invested that could be used to repay the debts at a minutes notice????…..

What are the Tax Implications with such a High Debt Load, Good or Bad????….

In the current interest rate environment, can higher Debt to Equity ratios be sustained.



Back in the Old Days punters like us only had those mythical % guidelines to help our decision making process - in todays environment we have endless research resources at our fingertips..



The Old Rules like the ones people refer to are just that, "Old Rules".



These are my personal observations, they may be of interest to some punters.
NOTE:- I hold ILU atm.
Remember to DYOR.

Cheers.

DrB

 

[mullokintyre]

Hit another 52 week high this morning.
Onwards and upwards, or as we say in Toy Story Land, to Infinity and beyond.
Mick

 

[DrBourse]

Hit another 52 week high this morning.
Onwards and upwards, or as we say in Toy Story Land, to Infinity and beyond.
Mick

I note that Profit Takers seem to hit ILU after almost every 2nd or 3rd Green Candles (Long and Short), SO, $13.00 looks like where they might hit again.
In the ST I am ignoring todays Candle Colour, The price action atm is more important than the Red/Green visual - LT Inds are all +ive atm - I would need to recalculate SP after that next ST Pullback.

 

[divs4ever]

Iluka Resources (ILU) announced its intention to “demerge Sierra Rutile” as an “ASX listed, West African focused mineral sands company”. ILU says that the demerger, which is expected to be completed in 2022, will “allow ILU to focus its capital allocation priorities & management attention on its core Australian assets & development opportunities”. ILU shares added 0.9%.

DYOR

i hold ILU

time will tell if the demerged company offers any value ( to me ) , NORMALLY i tend to avoid African-based businesses ( ZIM is the major exception )

 

[mullokintyre]

Iluka Resources (ILU) announced its intention to “demerge Sierra Rutile” as an “ASX listed, West African focused mineral sands company”. ILU says that the demerger, which is expected to be completed in 2022, will “allow ILU to focus its capital allocation priorities & management attention on its core Australian assets & development opportunities”. ILU shares added 0.9%.

DYOR

i hold ILU

time will tell if the demerged company offers any value ( to me ) , NORMALLY i tend to avoid African-based businesses ( ZIM is the major exception )

Analyst from Livewiremarkets provides an interesting case for demergers in general, and for ILU in particular.

Every CEO/board has a favourite division. Capital is a scarce asset and, when push comes to shove, that capital will tend to gravitate to the favourite child. When there are extra corporate costs, they will tend to be shoved more to the less loved children, which has the impact of understating the earnings of the 'ugly duckling'.

The CEO and chairman are then often forced to make a choice about which division is their favourite child as they must make the decision about where they are going to remain.

In the slew of recent ASX demergers including:

• Woolworths (ASX:WOW)/Endeavour (ASX:EDV),
• Graincorp (ASX:GNC)/United Malt (ASX:UMG), and
• Iluka (ASX:ILU)/Deterra (ASXRR),

The CEO and chairman both decided to go with Woolworths, United Malt and Iluka respectively.

In the Tabcorp (ASX:TAH)/The Lottery Company (ASX:TLC) demerger, the chairman went with The Lottery Company despite having a self-professed great relationship with the racing industry.

What happens next?​

The 'ugly duckling' company will typically get a new CEO, a new board and generally a new culture. We articulated in our first demerger note that some of the outperformance can be explained by the extra attention a demerged entity gets. However, we think it runs deeper.

The new team running the demerged business are unshackled from corporate overheads and frustrating constraints. This can give way to a new culture which is hungrier, leaner and more agile. This demerged business can make the right investments and seize on market opportunities without having to prepare a pitch book for head office.

The role of lifecycle in company demergers​

Some companies are great companies with great culture forever and some companies are badly run companies and have poor cultures forever. Most companies are somewhere in the middle. They go through periods of good decision making and periods of poor decision making.

Generally speaking, poor decision making usually occurs at points in time when things are going well. Either the cycle is in the company’s favour, or the management team are basking in the glory of previously astute decision making.
we have observed most companies drift between arrogance and humility.
The point here is that the worst decisions are generally made when times are good. We believe the opposite is also true. When people/companies have their backs against the wall, the survival instinct hones one’s decision-making ability, and people tend to make their best decisions. But, as we've mentioned,



Iluka has a market cap of $5.3 billion. It has a mineral sands business which will generate earnings of $700 million and we think is worth around $3.5 billion and it also owns a $500 million stake in Deterra. Therefore, one can imply a value of around $1.3 billion for its rare earths deposit and refinery.

By our calculations, the volume and earnings from Iluka’s rare earths business in a few years’ time will generate earnings, revenue, and volume from its rare earths business just over 50% of Lynas. (Lynas has a market cap of $9 billion.)

By these measures, the market should be valuing Iluka’s rare earths business of at least $4.5 billion as a stand-alone business rather than the $1.3 billion attributed to it by the share price.

We suspect one reason for this is the conglomerate discount.
We also believe that this conglomerate discount is applicable even when there is no “hot theme” involved, given how market participants like to think about their investment portfolio.

The article goes on longer, and IMHO is worth a good read, looking athe case of GNC and IPL.
Mick

 

[divs4ever]

DEMERGER OF SIERRA RUTILE HOLDINGS LIMITED
Iluka has today released the Demerger Booklet containing information regarding the proposed
demerger of Sierra Rutile Holdings Limited (Sierra Rutile).
The demerger will result in two independent ASX-listed companies. Iluka will continue to be a leading
global supplier of critical minerals. Sierra Rutile will be a West African focused mineral sands producer
and developer, with principal business activities including the operation of its existing Area 1 mine;
and progressing the development of the globally significant Sembehun project.
Iluka shareholders will have the opportunity to vote on the demerger at a meeting on 22 July 2022.
If the demerger proceeds, eligible shareholders will be entitled to receive one share in Sierra Rutile for
every Iluka share held at the demerger record date (5.00pm AWST 28 July 2022).
Iluka’s Directors unanimously recommend that shareholders vote in favour of the proposed demerger.
The Independent Expert, Deloitte Corporate Finance Pty Limited, has concluded that the demerger is
in the best interests of Iluka shareholders.
It is expected that the distribution of Sierra Rutile shares to Iluka shareholders will qualify for demerger
tax relief. As is usual, this is subject to a final ruling being issued by the Australian Tax Office post
demerger implementation.
Detailed information relating to the demerger is included in the following documents which have been
lodged with the ASX and posted on Iluka’s website
• Chairman’s Letter to shareholders
• Demerger Booklet
• Sierra Rutile investor presentation
• Proxy Form – General Meeting
• Demerger Sale Facility Form
Subject to shareholder approval, it is expected that Sierra Rutile shares will commence trading on the
ASX on a deferred settlement basis from 27 July 2022.
2
Teleconference details
Iluka will host a conference call for equity market participants to discuss the proposed demerger. The
call will take place at 8.00am (AWST) on Monday, 20 June 2022. Participants wishing to join the
conference call are advised to pre-register online by following the link the below.
Joining the conference call:
1. Please register in advance of the conference call using the link provided below. Upon
registering you will be provided with participant dial-in numbers, Direct Event passcode
and unique registrant ID. The conference ID is:1444168
2. In the 10 minutes prior to the event start time, you will need to use the conference access
information provided in the email received at the point of registering.
Direct Event online registration: https://apac.directeventreg.com/registration/event/1444168
This document was approved and authorised for release to the market by Iluka’s Managing Director.

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i hold ILU

 

[divs4ever]

ENEABBA RARE EARTHS REFINERY

EPCM CONTRACT AWARDED TO FLUOR
Iluka is pleased to announce it has awarded Fluor Australia (Fluor) the contract to complete the Front
End Engineering Design (FEED) and undertake Engineering, Procurement and Construction
Management (EPCM) services for the Eneabba rare earths refinery.
This is an important step in the delivery of the refinery and Iluka’s rare earths diversification. Fluor has
over 100 years of experience in engineering, procurement and construction services and has a strong
record in project delivery. Iluka looks forward to working closely with Fluor to ensure successful
execution of this globally significant development.
Iluka announced the final investment decision for the Eneabba refinery on 4 April 2022.
1
This development is fully funded under a risk sharing arrangement between Iluka and the Australian
Government. The refinery will be fully integrated, producing light and heavy separated rare earth
oxides and capable of processing feedstocks from Iluka’s portfolio and from a range of third party
suppliers. This includes both mineral sands and rare earths deposits. Construction is scheduled to
commence later this year, with first production scheduled for 2025.
This document was approved and authorised for release to the market by Iluka’s Chief Financial
Officer and Head of Development.
Investor and media enquiries
Luke Woodgate
Group Manager, Investor Relations and Corporate Affairs
Mobile: + 61 (0) 477 749 942
Email: investor.relations@iluka.com

==================================================================================

i hold ILU

not a particular fan of REEs and no production before 2025 rates this as a ' nothing-burger ' for me , but others might disagree